French association demands collective solutions for cyber coverage

AMRAE’s leadership and members are pressuring insurers to up their game in the critical area of cyber risk, or face losing a potentially huge future market as companies “go elsewhere”, warned the association’s president Oliver Wild.

French risk and insurance managers struggled along with their peers across Europe to find adequate cyber coverage at recent year-end renewals.

Limits on offer have been evaporating as prices spiral, leaving risk and insurance managers struggling to complete their programmes.

Wild said the approach from insurers simply does not make sense, when only five years ago they were talking of cyber being the only game in town.

He also said AMRAE members are frustrated by the lack of appreciation shown by carriers for good risk management and loss prevention work carried out by clients in recent times.

But he conceded that part of the problem is the lack of demand from SMEs, and public bodies in particular, for cyber cover. This is not making it easy for players in the insurance market to build an adequate pool of risks to diversify their books and offer better terms and conditions.

A big push from the whole risk and insurance management community is needed to overcome this supply-and-demand “imbalance”, said Wild.

“Cyber is a typical example of insurers’ strong aversion to risk. This is mainly because of the lack of dialogue on the good work done by companies. Cyber is very high on risk maps now and there has been a very strong investment from companies to develop a platform and build frameworks to deal with cyber crises,” Wild told Commercial Risk Europe as the AMRAE Rencontres got underway in Normandy.

“Obviously it is good to have such protection mechanisms in place, but the hackers are ahead of the game. Therefore, we need to balance protection and training to manage cyber crises… We have been calling for more dialogue for some time. Customers need a common understanding, questionnaires and the like to agree what level of protection is expected,” continued AMRAE’s president.

Wild conceded that AMRAE members have to make an effort to constantly upgrade their cyber loss prevention and risk management system, and ‘sell’ those efforts to insurers.

But he also feels strongly, along with many risk and insurance management leaders in Europe, that insurers haven’t covered themselves in glory during recent renewals in this critical line of business.

“We need to rebuild those strong partnerships with insurers and not have to go to a new carrier every year. Today, price is not really the issue because often we don’t even get a quote. Not even getting an answer at renewal is not acceptable,” said Wild.

“If you don’t have consistency, you cannot make an informed decision about what limits you get… Therefore, at Deauville we are asking the market to sit around a table and work this out. If they don’t, then there will be other solutions from risk managers and not just captives,” concluded Wild.